Key Takeaways
- Shares of Micron (MU) climbed approximately 1.6% during Friday’s premarket session, reaching $895.50 after Thursday’s decline
- South Korean competitor SK Hynix greenlit $38.15 billion for new semiconductor manufacturing plants in Korea
- Industry analysts don’t anticipate significant new memory chip production capacity for at least 12 more months
- Analysts project Micron will post EPS of $31.24 on revenue of $50.72B when earnings arrive around Sept. 22
- The stock has surged over 600% in the trailing 12-month period; Wall Street’s average price target stands at $1,548.86
Shares of Micron Technology experienced gains during Friday’s premarket session following news that competitor SK Hynix greenlit a substantial investment in additional chip production capacity. The stock advanced 1.6% to $895.50 ahead of the market open.
This uptick followed a challenging Thursday session that saw memory semiconductor stocks decline after quarterly reports from SanDisk and Western Digital disappointed investors. Friday’s recovery seemed more connected to improved technology sector sentiment than company-specific developments.
Futures for the Nasdaq climbed 0.43% while S&P 500 futures added 0.18%, providing a tailwind for major technology stocks throughout the session.
The SK Hynix board of directors authorized 54.3 trillion won, approximately $38.15 billion, for additional fabrication plants in South Korea. While significant, this figure pales in comparison to the June announcement when SK Hynix and Samsung revealed plans to collectively invest 800 trillion won, equivalent to roughly $518.58 billion, in developing semiconductor hubs in Korea’s southwest region.
SK Hynix’s American depositary receipts declined 0.8% during U.S. premarket hours. The company’s shares in South Korea dropped 4.9% on Friday.
For memory semiconductor investors, the critical factor remains when new production capacity becomes operational. Massive chip fabrication facilities require years of construction. Micron’s own $100 billion New York manufacturing complex, unveiled in 2022, isn’t projected to begin operations until 2030. Industry observers don’t expect substantial new memory production to commence for at least another year, with additional capacity scheduled for 2028.
This prolonged timeline for new supply continues supporting the optimistic outlook for Micron, particularly as artificial intelligence hardware requirements continue expanding.
Chart Analysis and Price Levels
Micron currently trades marginally beneath its 20-day moving average of $893.35, and sits approximately 8.2% under its 50-day moving average of $971.96. The relative strength index registers 47.66, indicating neutral price momentum.
Looking ahead, overhead resistance appears near $1,012. Downside support exists around $891.50. While the stock has retreated from June peaks, MU has still delivered approximately 688% gains over the past year.
The longer-term technical picture remains constructive. The 50-day moving average continues trading above the 200-day average, with MU positioned 67.8% above its 200-day moving average of $531.67.
Earnings Outlook and Analyst Perspectives
Micron’s next quarterly financial report is scheduled for approximately September 22. The Street consensus calls for earnings per share of $31.24, representing a substantial increase from $3.03 in the year-ago quarter, on revenue of $50.72 billion versus $11.31 billion in the comparable prior-year period.
The analyst community maintains a consensus Buy recommendation with an average price objective of $1,548.86.
Recent analyst activity includes Cantor Fitzgerald increasing its price target to $2,000 on June 29, while Keybanc elevated its projection to $1,750 on July 14. Both firms maintain Overweight ratings on the shares.
According to Benzinga’s proprietary rankings, Micron scores 99.62 for momentum and 97.65 for quality. However, its value score of 36.97 lags its other metrics, indicating the stock trades at a premium relative to comparable companies.
MU represents a significant position in multiple semiconductor-focused exchange-traded funds, including the Fidelity Disruptive Technology ETF at 9.33% weighting and the Invesco PHLX Semiconductor ETF at 8.91%.
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